THE CBI is looking to ascertain whether Bangalore-based start-up Devas Multimedia faked claims of ownership of intellectual property rights for digital broadcasting technology in its contract with Antrix Corporation, the commercial arm of Indian Space Research Organisation.
The investigation into the deal is looking at whether Devas owned DVB-SH (digital video broadcasting-satellite services to handhelds) at the time of signing the deal on January 28, 2005, or whether it sourced it from European Telecommunications Standards Institute (ETSI) after the deal.
Following its first chargesheet against eight ISRO and Devas officials for causing a loss of Rs 578 crore to the exchequer, the CBI said on August 11 it was looking further at the “DVB-SH technology developed by ETSI”.
In the contract, Devas had claimed it had “ownership and right to use the Intellectual Property used in the digital multimedia receivers and commercial information devices”. Investigations have indicated, however, that the DVB-SH technology Devas was looking to use was not fully developed then.
Over the last few years, Devas officials have claimed to have spent over Rs 1,000 crore in developing technologies for digital multimedia broadcasting via satellites to handhelds. Devas’s annual reports also indicate these technologies were being tested in India in 2009-10, prior to the February 2011 annulment of the deal by the government.
“We have brought about a technological revolution not only in the devices but also worked with ISRO to enhance their capabilities in the satellite sector,” Devas Multimedia CEO Ramachandran Vishwanathan had said in 2011. The CEO, however, also said the Antrix deal is “a consequence of technology developed from a variety of satellite projects”.
In its 2009-10 annual report, Devas said it had “so far engaged in research and development of advanced technologies and is now in the process of developing them with the creation of required infrastructure…” It said successful phase-1 technical trials had been conducted in partnership with Alcatel Lucent to demonstrate “hybrid satellite terrestrial technology”. “Successful device development and testing programs have been implemented with with vendors like Electrobit, Qantum, Sasken, Dibcom, Sequans as well as Alcatel-Lucent, Ericsson and Nokia Siemens Network,” the annual report stated.
In 2007, Devas acquired a Bengaluru-based company, Manipal Software, which held an ISP licence in order to test the digital multimedia services it was intending to launch in India, according to some Devas officials. After the takeover, it was renamed DCT Networks Pvt Ltd and functioned from the Devas address. Devas’s founder chairman, former ISRO official M G Chandrashekhar, also director at DCT Networks, said then that DCT Networks “has a category 1 ISP licence from the Department of Telecommunication for rendering Internet services”.
In May 2008 Devas got its own ISP licence from DoT and on August 18, 2008, following FIPB clearance, it received a Rs 323.25 crore infusion of funds through a 20 per cent stake purchase by German telecom major Deutsche Telekom. In March 2009, Devas received a licence for providing IPTV services, according to the 2010 annual report.
Since the annulment of the deal, Devas has challenged it in international courts. A Permanent Court of Arbitration tribunal at the Hague ordered in July that the Indian government must pay compensation to the tune of 40 per cent of investment by foreign investors in Devas. In September 2015, a tribunal of International Chamber of Commerce in Paris awarded Devas “damages and pre-award interest totaling $672 million” and “post-award interest accruing at 18% per annum on that sum until the award is fully paid”.